Category Archives: Bitcoin XT

What started out as a relatively quiet week ended in tragedy, as news of Mike Hearn abandoning Bitcoin sent the community into an uproar. Following this announcement from Hearn, the price fell below $400, and even found itself in the $350s for a brief time. Overall, the price declined by 15.54% this week, and most of those losses occurred during the shock caused by Hearn.

The week started on January 11, 2015 with the bitcoin price sitting at $449.60. With the markets determined to hold on to the $440s range established last week, the price stayed within the mid $440s for the rest of the day after falling out of the high $440s in the early morning.

Meanwhile, in the news, Bitcoin developer Peter Todd surprised the community when he revealed that he successfully completed a double spend attack against Coinbase. Todd took $10 from Coinbase and purchased Reddit gold for Jeremy Gardner of the Augur project. Coinbase is a popular wallet provider and exchange service in the bitcoin community — especially for newcomers — so the concerned reaction from the community was understandable.

Tuesday opened at $446.52, and proved to be the last day of the $440s range that Bitcoiners enjoyed for some time. Trading activity was remarkably flat for the majority of the day. Starting at 6 PM, though, there was a large bout of selling, and the bitcoin price fell into the $420s.

On Tuesday, we reported on another development in the drama surrounding Theymos and his policies of censorship in the Bitcoin-related assets that he controls. Coinbase was reinstated on the Theymos-controlled Bitcoin.org. This reinstatement comes after the company was removed following an announcement that Coinbase planned to test BIP 101 — more commonly known as Bitcoin XT. BIP 101 is the implementation drafted by Gavin Andresen, and would change the Bitcoin protocol to accommodate for large block size increases. Theymos has stood firmly against Andresen and BIP 101, removing any discussions regarding the implementation from r/bitcoin on Reddit, and BitcoinTalk.org.

Bitcoin rose to the low $430s at the start of the 13th and established a holding pattern in the high $420s-low $430s range that persisted for the entire day.

January 14 began with the bitcoin price at $431.07. The markets held in the low $430s for most of the day. However, during the evening hours, a massive price drop commenced. The price began dipping slightly at 5 PM, and by the end of the day the small decline turned into a massive selloff. By the close of the 14th, the price had fallen into the low $400s.

This sudden decline can be attributed to former Core developer Mike Hearn’s dramatic exit from the Bitcoin community. In a blog post, Hearn declared Bitcoin “doomed” because of a supposed inability of the community to reach consensus on the block size debate. Hearn said that since the network refused to accept his and Gavin Andresen’s XT proposal, the block size problem would continue to get worse until Bitcoin died. Citing mining centralization in China and issues with Chinese network infrastructure and regulation as additional pitfalls, Hearn stated that he decided to sell all of his coins and leave Bitcoin for good.

This Hearn-induced selloff continued well into Friday, January 15. The day opened at $416.43, and the price fell for the entirety of the day. The price fell below $400 at 8 AM, sinking to $392 by midday. Another large drop at 5 PM sent the price into the $360s, and after a small recovery the day ended in the $370s.

January 16 started with the bitcoin price at $371. As the community began to process the news from Hearn, it seems like traders composed themselves, and the markets stabilized. The decline bottomed out at $4352 in the early morning; afterwards, what looked like a recovery got underway. The price rose steadily throughout the entire day, reaching the high $380s in the evening.

Sunday, January 17 opened at $383.07, with the markets apparently stabilized in the $380s. Aside from a few brief dips into the high $370s, the price saw modest growth for most of the day, reaching the high $380s in the early evening. Some downward pressure at 6 PM sent the bitcoin price down to $380, and it spent the rest of the night hovering between $379 and $380. The week closed at $379.74, making for a massive 15.54% loss for the week.

What do you think will happen with Bitcoin in the coming week? Let us know in the comments below!

Reaching consensus can be difficult, and that’s something Mike Hearn wanted to tell the world on January 14th. In a Medium post, he calls “The resolution of the Bitcoin experiment”long-time Bitcoin developer Mike Hearn has left the industry. The statement that is quite long goes into a very detailed testimony to why he’s left and that he sold all his bitcoins.

Mike Hearn former Google engineer and the first person to implement Bitcoin in Java, lead developer of the controversial XT fork, and a person whose software he’s “written has been used by millions of users” is all done with the Bitcoin protocol. In fact, he said that it was a “failure” throughout much of the very extensive testimony. Hearn says:

“But despite knowing that Bitcoin could fail all along, the now inescapable conclusion that it has failed still saddens me greatly.”

Hearn follows this statement with great detail to why he’s leaving the Bitcoin protocol and moving on. He believes that most people don’t know that “people had issues moving money, erratic fees, mining is controlled by China, and companies involved are in an open civil war” Not only does he mention this array of failure points he adds that a reversal feature was added to the code. This “allowed buyers to take back payments they’d made after walking out of shops, by simply pressing a button (if you aren’t aware of this “feature” that’s because Bitcoin was only just changed to allow it)”

The block size issue was mentioned throughout much of the post. He contends that the blockchain is full saying, “you may wonder how it is possible for what is essentially a series of files to be “full”. The answer is that an entirely artificial capacity cap of one megabyte per block, put in place as a temporary kludge a long time ago, has not been removed and, as a result, the network’s capacity is now almost completely exhausted.” Hearn blames the mining industry for this matter most notably the core of miners based in China. He details the Scaling Bitcoin Conference had 90% of the network sitting upon the stage. He claims that because of certain restrictions in China the miners who reside there have some manipulation in the game. This gives them tremendous incentive to play the game this way he states:

“The Chinese internet is so broken by their government’s firewall that moving data across the border barely works at all, with speeds routinely worse than what mobile phones provide. Imagine an entire country connected to the rest of the world by cheap hotel wifi, and you’ve got the picture. Right now, the Chinese miners are able to — just about — maintain their connection to the global internet and claim the 25 BTC reward ($11,000) that each block they create gives them. But if the Bitcoin network got more popular, they fear taking part would get too difficult and they’d lose their income stream. This gives them a perverse financial incentive to actually try and stop Bitcoin becoming popular.”

The former developer also explains the hardships involved with the XT fork. He details how the XT network of users had suffered from severe DDoS attacks and the discussion was met with much hatred. Hearn explains, “It was a massive DDoS that took down my entire (rural) ISP. Everyone in five towns lost their internet service for several hours last summer because of these criminals. It definitely discouraged me from hosting nodes.” He goes into great description of the censorship on reddit and the battle of Coinbase and Bitcoin.org.

Then he goes into his own arguments with developers in the industry. Hearn seems to feel many different arguments have distorted the roadmap and states his reasons to why he did not attend the “bogus” scaling conference. He then describes his stance on how this discussion moved into the range of reversed fees. Hearn states, “Bitcoin Core has a brilliant solution to this problem — allow people to mark their payments as changeable after they’ve been sent, up until they appear in the block chain. The stated intention is to let people adjust the fee paid, but in fact, their change also allows people to change the payment to point back to themselves, thus reversing it. —This protocol change will be released with the next version of Core (0.12), so will activate when the miners upgrade. It was massively condemned by the entire Bitcoin community, but the remaining Bitcoin Core developers don’t care what other people think so that the change will happen.”

Hearn concludes the post by explaining that Bitcoin is in “dangerous” territory, but not all is lost. He says he was happy to work with many of the entrepreneurs in the space and all the innovative minds. But now even after many people from the “uncensored” reddit begged him to stay he is leaving. His final words to the crypto-audience states, “I’m afraid I’ve moved on to other things. To those people I say: good luck, stay strong, and I wish you the best.”

What do you think about Mike Hearn leaving? Let us know in the comments below.

There has been a lot of controversy surrounding the ongoing Bitcoin block size debate and the stance taken by major companies active in the digital currency world. After Coinbase had announced they were officially supporting Bitcoin XT – which is technically a fork of Bitcoin – the company was removed from Bitcoin.org as a listed Bitcoin exchange novice users should check out. But by the look of things, that decision has been reserved.

Coinbase Returns On Bitcoin.org

It goes without saying the whole debacle regarding the Bitcoin scalability issue, and Bitcoin XT client has been going for far too long already. Anyone who dared to express their opinion on the matter was greeted with skepticism, derogatory remarks, and deleted comments on Reddit. For some companies openly supporting Bitcoin XT, their services ended up being removed from Bitcoin.org for the time being.

Coinbase was one of the companies affected by this distracting aspect of the Bitcoin ecosystem, as their public support for Bitcoin XT got their listing on Bitcoin.org removed not too long ago. The Bitcoin community was not amused by this decision, as the Coinbase exchange and wallet service is of great value to the digital currency world.

However, a recent commit was posted on GitHub to revert this decision, and get Coinbase reinstated on the Bitcoin.org website. After a public outpouring of support for the company, there was no other option than agree with the majority of the Bitcoin community. As a result, Coinbase is now once again listed on the website under the “web” services.

“I think that Coinbase has gone above and beyond on this hardfork issue, so while they’re probably worse than some Web wallets like GreenAddress, I tend to think now that they’re at least not significantly worse than Circle. So while these sorts of Bitcoin banks are allowed, I’m OK with reinstating Coinbase.”

Brian Armstrong’s Clarification Swayed A Lot of Minds

After the original Coinbase announcement regarding them supporting Bitcoin XT, company CEO Brian Armstrong took to Reddit and explained a few things. One of the most important clarifications came in the form of expressing how Coinbase will always support the longest valid Bitcoin blockchain. By saying valid, Brian Armstrong refers to the blockchain with the economic majority.

It is good to see how the Bitcoin community came together to rectify this situation before things had gotten out of hand any further. Splitting the community and developers into separate camps is not what Bitcoin should be about, and we can only hope a final resolution to the block size debate will come sooner rather than later.

What are your thoughts on this reinstatement on Bitcoin.org? Is it the right decision? Let us know in the comments below!

According to CEO Brian Armstrong, Coinbase is now running the new version of Bitcoin software, Bitcoin-XT, a move which has divided the Bitcoin community in the past few days. The company is merely experimenting with the software, it stresses; however, this has inspired much contentiousness on online Bitcoin forums, including being removed from Bitcoin.org.

People are much divided on what implementation of Bitcoin to use, and there has been much debate, including a Scaling Bitcoin conference, dedicated to the updating (or not) of the Bitcoin protocol due to its current limitations of 1MB per block size.

Many people believe Bitcoin should be some sort of global currency, and towards that end, the current implementation of Bitcoin does not process enough transactions per block — which take approximately ten minutes to create — to power a modern economy.

Coinbase, one of the largest Bitcoin companies on the planet, has chosen to run the new Bitcoin core, which uses BIP101, as an experiment. Many companies have pledged support inside the Bitcoin space as proponents of the XT implementation.

Founded in June 2012, Coinbase earned a May 2013 Series A of $5 million USD. In December 2013, the company received US $25 million investment led by venture capital firms Andreessen Horowitz, Union Square Ventures and Ribbit Capital. The company formed partnerships with Overstock, Dell, Expedia, Dish Network, Time Inc and Wikipedia before receiving $75 million investment including New York Stock Exchange.

Coinbase is a major influence in the Bitcoin sphere and this move could have reverberations through the Fintech space.

The debates, which cropped up over the weekend, will likely cause the Bitcoin community to reach conclusions quicker about what future protocol of Bitcoin should be used, and now Coinbase is at the center of that debate.

What do you think about Coinbase’s removal from Bitcoin.org? Let us know in the comments below!